The Big Fix

To break the bank in Black Hawk, you don't have to be a gambler--just a homeowner.

In the old days, buying a house in the mountain town of Black Hawk was like moving to Appalachia. Residents lined the cracked windows of their miners' shacks with quilts to keep out the cold. Living-room floors were made of bare dirt. Porches sagged and chimneys crumbled, and many of the homes hadn't been painted since the Great Depression. Some of them looked so shabby that the operators of the posh Central City Opera up the road donated buckets of paint to keep the place looking spiffy for music buffs who motored through Black Hawk on their way to performances.

"The town was falling down," recalls former Black Hawk mayor Bill Lorenz. "When I came up here in 1956, you could buy most any house for $5,000."

Today, though, the streets of Black Hawk are filled with the whir of buzz saws and the pounding of hammers. Every other house seems to be under construction. The ubiquitous two-bedroom cottages of Black Hawk are being rebuilt from their floorboards to their chimneys. Even the nineteenth-century city hall has undergone a dazzling renovation, right down to the antique safe used to store documents.

It's nice remodeling work if you can get it. And in Black Hawk, you don't have to try very hard. That's because the civic renaissance in this old mill town comes courtesy of Colorado taxpayers--one of the many unintended consequences of the state's introduction of legalized gambling.

The constitutional amendment allowing limited gaming approved by voters in 1990 specified that a certain percentage of gaming-tax revenues be given to the old mining towns of Black Hawk, Central City and Cripple Creek for "historic preservation." What no one could have predicted was that tiny Black Hawk would emerge as Colorado's own mini-Las Vegas, pulling in the lion's share of gaming revenues and the taxes that go along with it.

As a result, money for historic renovation has flooded into the town, which counts only 160 residents and 78 houses. Black Hawk has already spent nearly $2 million fixing up local residences--enough to give every homeowner in town more than $25,000. Several members of the Board of Aldermen, even the mayor herself, have received annual grants of up to $30,000 to spruce up their homes. One member of the town planning commission has been awarded $140,000 to renovate his house.

Historic-renovation programs in Central City and Cripple Creek have been low-key and largely low-budget affairs. Cripple Creek doesn't even have a program to refurbish private residences, while Central City limits its housing effort to homes at least fifty years old and caps annual grants at $7,500.

But Black Hawk's distribution of so much money with what appears to be very little oversight is attracting scrutiny. The local district attorney charges that Black Hawk's generous historic-renovation grants have become a magnet for unscrupulous contractors hoping to make a fast buck off the program. A state legislator who helped author Colorado's gaming laws is calling on lawmakers to investigate the program. Even Colorado Bureau of Investigation agents, in town to keep organized crime from infiltrating the gaming districts, have instead set their sights on possible corruption within the historic-restoration program, their interest piqued by letters to the editor in the local newspaper.

Earlier this year, a grand jury in the First Judicial District, which includes Gilpin County, indicted on three counts of felony theft a Black Hawk company that specializes in renovating homes. The indictment accuses the firm, Historic District Management Company, of skimming grants and illegally shifting funds to finance work that had not been authorized by the Black Hawk town board.

Dennis Hall, senior deputy district attorney for the First Judicial District, says the Black Hawk program is ripe for abuse. "The whole attitude up there is, 'We're owed this, and who are you to tell us how to spend this money?'" says Hall. "Somebody could spend their $25,000 on a golden arches and a drive-thru."

Hall says Black Hawk officials have gone far beyond what voters intended when they approved limited-stakes gaming in 1990. "They've been looking at this as one more entitlement program," he says. "Most people who've heard of this case think they want to move up there and buy a house."

Town residents have circled the wagons against critics; many of them, including Mayor Kathryn Eccker, refuse to answer questions about the program. But those who will talk staunchly defend the renovation effort. They say none of the work is extravagant, adding that it's the only way to keep most of Black Hawk's neighborhoods from sliding off steep hillsides, where onetime miners' cabins are strung out along former goat paths.

"Before, these houses were dilapidated," says Black Hawk planning director Mark Kieffer, pointing to a row of small wooden houses perched on the edge of a mountain. "The squalor in these places was horrendous. They were also fire hazards. There are still people who heat their homes with wood-burning stoves."

Without the residential-renovation program, says Kieffer, Black Hawk's neighborhoods would slowly be abandoned, and there would be nothing left but the casinos that already dwarf the town. Because Black Hawk was always a scruffy, working-class town--unlike aristocratic Central City up the hill--most of the homes were built without foundations, on sites that miners and mill hands carved out of the mountainside. That makes renovation incredibly expensive, says Kieffer, since the small homes have to be rebuilt from top to bottom. "In Denver these houses would be demolished," he adds. "It takes $20,000 to $30,000 just to bring a lot of these houses up to a marginal standard."

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